Dr. Dre is doing OK! Apple to buy his Beats for $3 billion

Dr.
Dre? He's doing more than OK! Computer titan Apple is buying his
company, Beats - which he co-founded for Jimmy Iovine, is being bought
out for a cool $3 billion. Rumors had been brewing for several weeks.

Dr. Dre? He's doing more than OK! Computer titan Apple is buying his company, Beats - which he co-founded for Jimmy Iovine, is being bought out for a cool $3 billion.

Highlights

LOS ANGELES, CA (Catholic Online) - Under the terms of the agreement, Apple will pay $2.6 billion up front, plus another $400 million over time. Beats Electronics has been known for their stylishness. Part of the deal will include a streaming service with Beats Music.

While exciting in some quarters, the agreement is relatively "chump change" for Apple. As of last year, the company has $159 billion in the bank.

Some are questioning the acquisition of Beats. While the music streaming service has an estimated half million customers, this is relatively small in comparison to Spotify's four million subscribers. The music streaming service Pandora is valued by investors at $5.2 billion, and has more than 250 million active accounts. Apple could buy Pandora thirty times over.

Apple CEO Tim Cook greeted the acquisition with enthusiasm. The deal, he says, brings together "extraordinary teams so we can continue to create the most innovative music products and services in the world." Apple expects the deal to close in late summer or early fall.

Beats founders Iovine and Dr. Dre are both successful music producers who launched the company back in 2006 and quickly grew it via celebrity endorsements.

Dre has declared himself "the first billionaire in hip hop." His stake in Beats, estimated at 20 to 25 percent, is expected to push his net worth of $550 million close to that number. It's unconfirmed if Dre is a billionaire just yet.

Iovine described the deal as a match made in heaven. He said the whole Beats concept was inspired by Apple's perfect blend of culture and technology.

"I've always known in my heart that Beats belonged with Apple," Iovine said in a statement.

Both Dre and Iovine intend to join Apple, so Iovine is stepping down from his perch as CEO of the record company Interscope Geffen A&M.